Global Economy on a Recessionary Path

The United Nations Conference on Trade and Development (UNCTAD) has issued a stark warning: the global economy is veering towards a recession, with growth potentially slowing to a mere 2.3% in 2025. This alarming forecast was highlighted in their latest report, pointing to a combination of factors that threaten economic stability worldwide.

Trade Tensions and Policy Shocks

According to UNCTAD, the global economic outlook is marred by escalating trade tensions and an unprecedented level of trade policy uncertainty. "Trade policy uncertainty is at a historical high," the report states, emphasizing how this uncertainty is already causing delays in investment decisions and a reduction in hiring. The report also underscores the impact of policy shocks and financial volatility on global growth.

Projected Growth Rates by Region

The report provides a grim outlook for several major economies: the United States is expected to see a growth rate of just 1.2% in 2025, with both the UK and the EU trailing slightly behind at 1%. In contrast, China's economy is projected to grow by a more robust 4.4%, showcasing a significant divergence in economic trajectories.